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Peloton stocks tumble after it lowers forecasts

Published November 5, 2021
Peloton's CEO falls out of the Billionaire's Club, at least for now.

NEW YORK (BRAIN) — Peloton Interactive Inc. shares were down more than 34% on Friday after the company lowered its forecasts for 2022 sales.

Peloton is now forecasting full-year fiscal sales of $4.4 billion to $4.8 billion, down from a previous forecast of $5.4 billion.

"We anticipated fiscal 2022 would be a very challenging year to forecast, given unusual year-ago comparisons, demand uncertainty amidst re-opening economies, and widely-reported supply chain constraints and commodity cost pressures," the company said.

"While we are reducing our near-term forecast, our confidence in and commitment to our strategy is unchanged. Software and streaming media have redefined at-home fitness and are driving a migration of workouts into the home, a consumer behavioral shift that we believe is still in its early stages. This trend was well-underway prior to the pandemic, and has clearly been accelerated by the growing awareness and adoption of Connected Fitness over the past year and a half. In conjunction with our revised demand forecasts, we will be taking concrete steps to re-examine our expense base and adjust our operating costs to better align our investments with our revised growth expectations," the company said.

Peloton slightly exceeded forecasts for its first quarter of 2022, which ended Sept. 30. Subscriptions grew 87% in the quarter, to 2.49 million. Total membership grew to 6.2 million. Revenue grew 6% to $805.2 million in the quarter.

However, Peloton lowered its forecast for connected fitness subscriptions to 3.45 million by the end of the year, down from a previous forecast of 3.63 million. And it lowered its full-year gross margin forecast from 34% to 32%. The final result is forecast to be a loss of $475 million for the year.

Bloomberg reported Friday that Peloton CEO founder John Foley saw his net worth fall below the $1 billion level on Friday due to the stock price decline. 

Topics associated with this article: Earnings/Financial Reports

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